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Resource Wealth and Entrepreneurship: A Blessing or a Curse?

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  • Mohammad Reza Farzanegan

    (University of Marburg)

Abstract

Resource-rich countries of the Middle East and North Africa (MENA) have the highest youth unemployment rate in the world. While other parts of the world are experiencing an increasing trend in new firms’ formation as a potential solution for their unemployment problem, the MENA region has the lowest records in new business establishments. In this study, we investigate the reasons behind such a significant lag of the resource-rich countries in entrepreneurship. Panel data for more than 80 countries from 2004-2009 shows that higher dependence on resource rents reduces entrepreneurship activities. The decline is more significant in countries with higher levels of point resources such as oil and coal.

Suggested Citation

  • Mohammad Reza Farzanegan, 2012. "Resource Wealth and Entrepreneurship: A Blessing or a Curse?," MAGKS Papers on Economics 201224, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:201224
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    1. Resource Wealth and Entrepreneurship: A Blessing or a Curse?
      by UDADISI in UDADISI on 2012-07-03 00:23:00

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    3. Driouchi, Ahmed, 2015. "Creation of Enterprises & Knowledge Economy in the Arab Countries," MPRA Paper 67366, University Library of Munich, Germany.

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    More about this item

    Keywords

    resource curse; entrepreneurship; panel data;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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